I don't know...there is more to this story than meets the eye. Banks are not handing out loans, and hanging onto properties without letting them go for less than current market prices for a reason.
Do you think the banks are not strategizing?
The AMERICAN way is capitalism. The INCENTIVE is capitalism. The RESOLUTION is capitalism.
If an independent corporation were to present this idea no one would want to hear it...now mention bringing in the governmen, that sounds like it would be (a little) "safer".
Why would the government want to get involved?
If I were to try and read between the lines, it almost sounds like a way to get control of bank owned properties to level home sales competition.
- "...buy defaulted loans from lenders at 50 percent of face value".
Why not just let individuals purchase these available properties for that much? Interest rates are fairly low. But, there isn't a whole profit in that is there?
- Re-market these homes through Realtors at retail market value.
That sounds like a remark to get Realtors behind the bandwagon to push things along.
Those of you who would like to wait a year for commission on a lease/option to buy, raise your hand! ;)
- Offer these homes to first time buyers and those whose credit and FICO scores have been damaged by short sales and foreclosures the last couple of years.
(Just those individuals, I doubt it.)
- The initial terms would be a 12-month lease-purchase, with all payments accruing to a down payment as long as payments are made on time. Lease payments would equal what loan principle, interest, taxes and insurance would be under normal loan terms at 5 percent interest. Initial move-in would entail first and last months' payments.
Where is the rest of the paragraph that states: but unlike a security deposit, you don't get the option money back at the end of the lease if you can't purchase the house or decide not to.
At the end of 12 months, the lease would become a purchase with all payments made under terms of the lease being applied to the full down payment.
If home prices drop (even more), you are still committed the retail market price from a year before.
...and what about interest rates, are they locked in a year in advance of actual purchase?
I am also betting interest rates will go up next year.
If Banks are going to let these properties "go" at face value, then they should not go to American Incentive Resolution, but AMERICANS.
I am also predicting banks will drop the prices of their foreclosed properties next year.
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